Accredited Investor
As defined in Rule 501(a) of Regulation D includes certain institutional investors and (a) any natural person whose individual net worth, or joint net worth with that person's spouse, exceeds $1 million at the time of purchase; or (b) any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and who reasonably expects reaching the same income level or greater in the current year.At nvst.com, Accredited Investors are classified under Investors.

Blue Sky Laws
State laws that govern the registration and sale of securities.

Business Broker or Intermediary
Professionals who arrange mergers, acquisitions and various funding of companies with most of their transactions in the under $1 million market. Business Brokers or Intermediaries do not have their own fund to invest. At nvst.com, Business Intermediaries are classified as Advisors.

Cash Flow
There are many definitions of cash flow. The reader should demand that an explanation of how cash flow was computed accompany the result.

Corporate Acquirer
A company seeking acquisitions that provide more than the profits and cash flow of the acquisition target and may include the desire to acquire operational economies, additional market share, technology or some other synergy. At nvst.com, Corporate Acquirers are classified as Investors.

Due Diligence
A. The reasonable investigation performed by the Underwriter and mandated by the SEC to protect the investing public who may fairly rely on an Underwriter's conduct.
B. The reasonable investigation performed by the Acquirer prior to the purchase of a business.

EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization. This level of earnings is utilized to communicate the earnings of a company prior to the current corporate tax planning or capitalization considerations.

Financial Buyer
An individual, investment group or investment company seeking acquisitions that provide favorable the profits and cash flow. At nvst.com, Financial Buyers are classified as Investors.

Investment Letter Stock
Unregistered (restricted) stock in which the issuer usually receives a letter from the purchaser stating that the purchase of the securities is for investment purposes only and is not being purchased with the intent of reselling.

IPO Process
In an Initial Public Offering, Underwriter(s) will purchase some of the stock of a privately held company which may then be sold in the public market. The source of funding for the company is the discounted price that the Underwriter(s) are willing to pay. The Underwriter takes the risk of the public market pricing, and this subsequent trade of the stock does not provide any additional source of funding for the company. This is how a company's stock becomes publicly traded.

IPO Candidate
Here is a general list of the various aspects that underwriters target, but the reader should note that there are many exceptions:

• Annual Growth Potential of 20%+
• Proven Management Team
• Earnings of $1 million+
• Company Valuation post IPO of $20 million+
• Industry in Favor
• Market Niche or Lead Position

Intermediary
Professionals who arrange mergers, acquisitions and various funding of companies with most of their transactions in the $1 million+ market. Intermediaries do not have their own fund to invest. At nvst.com, Intermediaries are classified as Advisors.

Investment Banker
Professional who raises capital and arranges mergers & acquisitions of companies with most of their transactions in the $10 million+ market. Investment Bankers do raise their own fund to invest. At nvst.com, Investment Bankers are classified as Investors and Advisors.

Investment Company/Group
Investment Companies seek business investments that return favorable profits and cash flow. They may participate in venture, mezzanine, or leverage buyout stages and equity or debt financing. They do not usually provide advisory services during the term of their investment. At nvst.com, Investment Companies are classified as Investors.

LOI - Letter of Intent
A. The agreement signed by a Company and their Underwriter to document their understanding of expected offering price, Underwriter's discount and the responsibility for expenses while pursuing the IPO.
B. The agreement signed by a Company and an Acquirer to document their understanding of expected purchase price, purchase terms, time line and what is expected of the parties prior to drafting a definitive purchase and sale agreement.

Offering Circular
The document substantially similar to a prospectus used for offerings that are exempt from SEC registration.

Prospectus
A part of the SEC registration statement that contains a discription of the company issuing the securities and contains information about the securities being sold.

Red Herring Prospectus
A preliminary prospectus relating to a registration statement filed with the Securities and Exchange Commission that has not yet become effective.

SBIC
Small Business Investment Companies are licensed and regulated by the Small Business Administration to provide provide funding for businesses. They may borrow funds from the government at low interest rates. They prefer debt lending over equity so that their loan repayments can cover their borrowing from the government. At nvst.com, SBICs are classified as Investors.

SIC
The description for the Standard Industrial Classification (SIC) Code, which represents the type of work performed by a business establishment.

Review SIC Codes by industry or keyword

Security
Any note, stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, reorganization certificate or subscription, transferable share, investment contract, voting trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, or, in general,, any interest or instrument commonly known as a "security," or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing .

Tombstone Ad
An advertisement for the sale of a security that is placed by investment bankers to call attention to their prospectus. Also describes a post-sale or post-funding announcement of a deal that has been completed that may be published to announce the contribution of an advisor or the participation of an investor in the deal.

Underwriter
Underwriters raise capital for a business, arrange mergers and acquisitions, and provide advisory services such as business valuations. The capital raised may be in the form of debt or equity and may be from private or public sources. Underwriters have the ability to sell securities and may focus on institutional sales or may pursue retail sales through their own retail brokerage operations. At nvst.com, Underwriters are classified as Investors and Advisors.

Underwriting Syndicates
An IPO will generally be lead by one or more managing Underwriters who form a group called a syndicate to share in the risk and to increase potential for distribution of the securities.

Venture Capitalist
Venture Capitalists raise capital (commonly known as risk capital) for a business and provide advisory services during the term of their investment. The capital raised may be in the form of debt or equity and may be from private or public sources. They usually specialize in specific stages of investment and/or specific industries that they know well. At nvst.com, Venture Capitalists are classified as Investors and Advisors.